At 82, Murdoch reinvents the family firm

Rupert Murdoch (left) with new News Corp boss Robert Thomson and, inset, the new News Corp logo which is based on Rupert and father Keith Murdoch’s handwriting.

Ben Holgate and Ben Potter

Rupert Murdoch admitted he has made “spectacular” mistakes and is now asking investors to prop up the old part of his media empire with new entertainment businesses.

The 82-year-old invoked heritage and nostalgia by unveiling a fresh logo for News Corp at a briefing for investors in New York about the company, which will be split in two next month. The logo, which is designed like a cursive script based on his handwriting and that of his late father, Sir Keith Murdoch, reflects the newspaper publishing business that has been the emotional heart of his global empire for six decades.

Now Mr Murdoch is relying on two lieutenants, who are poles apart in character, to continue the family legacy.

Robert Thomson, a former journalist and editor who is often described as a surrogate son to Mr Murdoch, will be chief executive of News Corp after the split on June 28.

At the briefing on Tuesday, Mr Thomson pledged to be “relentless” in cutting costs, which will mostly come out of the structurally challenged newspapers in Australia, the US and Britain.

The executive charged with overseeing the cost-cutting in Australia, News Ltd chief executive Kim Williams, who is as renowned for his formidable intellect as for his cultural pursuits, outlined his plan to leverage News’ domestic pay TV assets Foxtel (50 per cent stake) and Fox Sports Australia, as well as its 62 per cent stake in online real estate advertising company REA Group, to increase subscription revenues to offset declining publishing income.

“The ad environment remains very challenged,” Mr Williams said.

Pushing ahead

For the first time, Mr Williams outlined News’ domestic strategy, which focuses on the three parts of the local operations: publishing, pay TV and online real estate. He said the three have “close symbiotic relationships”.

Mr Williams is already pushing ahead with bundled subscription offers for its newspapers and Fox Sports. But the pay TV assets are showing signs of weakness amid consumer malaise. Foxtel’s subscriber numbers are flat at 2.3 million and Fox Sports Australia’s earnings have slid backwards for almost two years. News last week said it would write down the value of its publishing assets by up to $US1.4 billion, mostly due to Australian newspapers.

Mr Murdoch, who will be executive chairman of the new News Corp, reminded investors he had built one of the world’s most successful media and entertainment ­conglomerates. Although some of the assets “have their individual challenges”, he argued the newspapers “are undervalued and underdeveloped”. “I am not saying I didn’t make many mistakes along the way – even some spectacular ones,” he conceded. “Why do it all over again? The simple answer, there is opportunity everywhere.”

Rely on non-family executives

Although Mr Murdoch’s sons James and Lachlan will be on the company’s board (as well as that for the other company, 21st Century Fox), the ageing media titan has had to rely on non-family executives to continue the family publishing legacy.

Mr Murdoch said it was “pretty unlikely” that News Corp would be able to buy any newspapers in its existing markets.

Mr Williams said “weak government leadership” in Australia had created business uncertainty and depressed consumer confidence.

He expected a slow recovery after “a generally anticipated change of ­government” in the September ­federal election.